I agree with the Government's concern with desperate people being taken advantage of by ‘loan sharks'.

Sometimes, however, their service is vital for people to make ends meet, given a critical situation in their lives.

We do need to set controls and regulations to protect the borrower and limit the greed of the lender.

I wonder if it might be fairer if lenders are permitted to charge, say 15 per cent for an unsecured loan, but when the full debt is repaid by the borrower (and the risk of repayment is removed) the lender then refunds a lump sum to the borrower so that their final resulting interest rate works out at just 8 per cent.

That is still a good return in today's market and the risk has been covered. The borrower will have more incentive to repay regularly knowing that there is a lump sum coming their way.

Of course, the lender should supply the borrower with a spreadsheet, detailing all the payments, etc.

M Windsor, Tauranga